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DECISION No

DECISION No. 1280/2002/QD-NHNN OF NOVEMBER 19, 2002 PROMULGATING THE MODEL CHARTER ON ORGANIZATION AND OPERATION OF JOINT-VENTURE BANKS

THE STATE BANK GOVERNOR

Pursuant to State Bank Law No. 01/1997/QH10 and Credit Institutions Law No. 02/1997/QH10 of December 12, 1997;

Pursuant to the Government�s Decree No. 15/CP of March 2, 1993 on the tasks, powers and State management responsibilities of the ministries and ministerial-level agencies;

Pursuant to the Government�s Decree No. 13/1999/ND-CP of March 17, 1999 on organization and operation of foreign credit institutions and their representative offices in Vietnam;

At the proposal of the director of the Department for Banks and Non-Bank Credit Institutions,

DECIDES:

Article 1.- To promulgate together with this Decision the model charter on organization and operation of joint-venture banks.

Article 2.- This Decision takes effect 15 days after its signing.

Article 3.- Within 9 months as from the date this Decision takes effect, joint-venture banks shall base themselves on the model charter on organization and operation of joint-venture banks promulgated together with this Decision to elaborate their own charters, then submit them to the State Bank Governor for approval.

Article 4.- The director of the Office, the director of the Department for Banks and Non-Bank Credit Institutions, the heads of the units of the State Bank, the directors of the State Bank�s branches in the provinces and centrally-run cities, the chairmen of Managing Boards and general directors of joint-venture banks shall have to implement this Decision.

For the State Bank Governor

Deputy Governor
TRAN MINH TUAN

MODEL CHARTER APPLICABLE TO JOINT-VENTURE BANKS

(Promulgated together with the State Bank Governor�s Decision No. 1280/2002/QD-NHNN of November 19, 2002)

Chapter I

GENERAL PROVISIONS

Article 1.- Parties participating in the establishment of a joint-venture bank (JVB)

1. The Vietnamese party (including one or several Vietnamese banks):...

- The bank�s establishment and operation license No...., dated...

- Head office: ...

- Representative: ... (Full name - Post - Nationality)

2. The foreign party (including one or several foreign banks):...

- The bank�s establishment and operation license No...., dated...

- Head office: ...

- Representative: ... (Full name - Post - Nationality)

Article 2.- Identifications of a JVB

1. Name of JVB:... (in full and in abbreviation), with its head office in ..., Vietnam;

Telephone: ...

Fax: ...

E-mail: ...

2. JVB is established and operates under JVB establishment and operation license No..., dated..., issued by the State Bank.

3. Joint-venture bank has the Vietnamese legal person status, its own seal and accounts opened at the State Bank and other credit institutions according to the State Bank�s regulations.

4. Charter capital of the JVB is ...

Of which:

- The Vietnamese party contributes ..., making up...% of the charter capital

- The foreign party contributes ..., making up ... % of the charter capital

(Proportions and modes of capital contribution by the JVB parties are presented in detail)

5. JVB is a form of credit institution, conducting banking operations and other relevant business activities for profits according to plans approved by the Managing Board and compliant with the law of the Socialist Republic of Vietnam.

Article 3.- Operation duration

The JVB shall have the operation duration of ... years after it is granted establishment and operation license by the State Bank. The JVB�s operation duration may be extended according to the agreement between the joint-venture parties and with the State Bank Governor�s approval; each extended duration must not exceed the operation duration previously inscribed in the license.

Chapter II

OPERATION CONTENTS, RIGHTS AND OBLIGATIONS

Article 4.- Operation contents

JVBs shall comply with the provisions of the Law on Credit Institutions and other current law provisions on:

- Banking activities

- Observance of regulations on assurance of safety in their operations.

(May be stipulated in detail)

Article 5.- Rights and obligations

1. JVBs have the law-prescribed rights to:

a/ Organize the management and business in line with their operation objectives.

b/ Enjoy the financial autonomy, take initiative in business and self-responsibility for business results, preserve and develop capital in order to ensure the growth of their business activities.

c/ Refuse to satisfy any inquiries which are not compliant with law provisions;

d/ Exercise other rights.

2. JVBs have the law-prescribed obligations to:

a/ Protect interests of depositors, fulfill their commitments towards customers and other credit institutions.

b/ Manage business operations.

c/ Comply with regimes and regulations on finance, accounting, reporting and auditing.

d/ Perform other obligations.

Chapter III

ORGANIZATIONAL STRUCTURE, ADMINISTRATION, MANAGEMENT AND CONTROL

Article 6.- Operating network

1. Head office

2. Transaction bureau at place where the head office is located

3. Branches

4. Other forms prescribed by law.

Article 7.- Structure of the managerial and executive apparatus

1. Managing Board.

2. Control Board.

3. General director and assisting apparatus.

4. Internal inspection and auditing system.

Article 8.- Managing Board

1. The Managing Board performs the function of managing the JVB and is the top competent body of the JVB. The parties to JVB shall nominate members to the Managing Board.

2. The JVB Managing Board has ... members (at least 3 members), including:

- The Vietnamese party: ... members

- The foreign party: ... members

3. The term of office of the Managing Board�s members is ... years (agreed upon by the parties themselves, but not exceeding 5 years). The Managing Board�s members may be re-appointed. The Managing Board�s members shall not be salaried but may enjoy allowances related to the Managing Board�s operation and decided by the Managing Board.

4. The Managing Board�s chairman shall be unanimously elected by the parties on the basis of nomination by the ... party (and may be alternated between the parties), have to convene and chair the Managing Board�s meetings, organize the supervision of observance of the Managing Board�s resolutions.

5. Each party has the right to replace its own representative to the Managing Board on the condition that it must notify the other party at least ... days in advance (agreed by the parties themselves). In any circumstances, such replacement must be approved by the Governor and cause no harm to or impact on the JVB�s operation.

6. Tasks and powers of the Managing Board.

(JVBs shall prescribe such in detail by themselves)

Article 9.- Working regime of the Managing Board

1. The Managing Board shall meet at least once a year. In case of necessity, the Managing Board may hold extraordinary meetings at the requests of its chairman, general director, first deputy general director or of at least over a half of the number of the Managing Board�s members.

2. The Managing Board�s meetings shall be convened and chaired by its chairman. In cases where the chairman is absent, he/she shall authorize a deputy chairman (authorized deputy chairman shall chair the meeting with the chairman�s full power within the ambit of authorization).

3. The Managing Board�s members shall receive meeting convening notices (notices for short) at least... working days (agreed by the parties themselves) before the meeting, counted from the date the notices are sent. Notices shall be sent to the members in writing and with signature of the Managing Board�s chairman, clearly inscribing the meeting�s date, venue and agenda.

A notice shall be considered valid when it is made by the following mode: ... (The parties shall agree on and specify by themselves the mode of sending notices).

4. The Managing Board�s meetings shall be considered valid when they are attended by at least two thirds of the number of the Managing Board�s members being the joint-venture parties� representatives. The Managing Board�s members may authorize in writing their representatives, who are also the Managing Board�s members, to attend meetings and vote on the authorized matters (JVBs may prescribe this more specifically).

5. The Managing Board shall adopt decisions falling under its competence by way of voting at its meetings or gathering of written comments thereon.

6. The most important issues regarding the organization and operation of the JVB shall be decided by the Managing Board on the principle of unanimity (by mode of open or secret voting), including: appointment and dismissal of the general director and first deputy-general director; amendments and supplements to the JVB�s charter and other issues (agreed upon by the parties themselves in the charter).

7. Regarding issues not mentioned in Clause 6 of this Article, the Managing Board shall decide on the principle of voting by majority of the Managing Board�s members present at the meeting. In cases where the Managing Board�s votes for and votes against are equal, the final decision shall stay with the side where exist the vote of the meeting chairperson.

Article 10.- The Control Board

1. The Control Board has... members (at least 3 members) and shall be entitled to use the internal inspection and auditing system for the performance of their tasks. The tenure of the Control Board is... years.

2. The Control Board�s members shall be appointed and dismissed by the Managing Board.

3. The Control Board shall be answerable to the Managing Board for its operation, submit to the latter its reports on inspection activities and assessments of annual reports of the JVB.

4. Tasks and powers of the Control Board.

(Prescribed in detail)

Article 11.- General director, deputy-general directors and assisting apparatus

1. The general director shall be answerable to the Managing Board for the management of the JVB�s daily activities according to his/her tasks and powers provided for by law. The general director is assisted by a number of deputy general directors, chief accountant and the professional and specialized apparatus. The general director and deputy general directors shall be appointed and dismissed by the Managing Board.

2. The general director shall be unanimously elected by the parties on the basis of nomination by... party (and may be alternated between the parties), having the following tasks and powers:... (provided for in detail).

The first deputy-general director shall be unanimously elected by the parties on the basis of nomination by... party (and may be alternated between the parties), having the following tasks and powers:... (provided for in detail).

3. In cases where the general director and the first deputy-general director have divergent opinions on the management of the JVB, the general director shall have the right to make decision, but the first deputy-general director may reserve his/her opinions for consideration and decision by the Managing Board at its nearest meeting.

Article 12.- The internal inspection and auditing system

The internal inspection and auditing system belongs to the executive apparatus, assisting the general director in managing all professional operations of the JVB in a smooth, safe and lawful manner.

Chapter IV

FINANCE, ACCOUNTING, REPORTING AND AUDITING

Article 13.- Working capital

Working capital of JVBs includes the following sources:

1. Charter capital;

2. Borrowed capital;

3. Assorted funds;

4. Other kinds of capital as provided for by law.

Article 14.- Division of profit and loss

Profits and losses shall be divided to the joint-venture parties according to the capital contribution proportions: ... (prescribed in detail)

Article 15.- Use of assets

1. JVBs shall use their assets in line with their operation objectives. The parties shall not be allowed to use JVBs� common assets for their own interests.

2. In the course of investment in Vietnam, other lawful capital and assets of the foreign parties to JVBs shall not be requisitioned or confiscated by administrative methods, and JVBs shall not be nationalized.

Article 16.- Reporting, accounting and financial regime

1. JVBs shall observe the regime of information and reporting, regime of accounting vouchers, cost-accounting and financial regime according to the current provisions of law.

2. The fiscal year of a JVB shall begin on January 1 and end on December 31 of a calendar year.

Article 17.- Auditing

JVBs� operations shall be audited by an indepen-dent auditing company approved by the State Bank.

Chapter V

LABOR, COMMENDATION AND DISCIPLINE

Article 18.- Labor recruitment

All laborers working for JVBs shall be recruited and employed in compliance with the current law provisions. Vietnamese citizens shall be given priority in recruitment, if they meet the job requirements.

Article 19.- Rights and obligations of laborers

Rights and obligations of laborers are secured by labor contracts signed between laborers and general directors in compliance with the current law provisions.

Article 20.- Labor training

JVBs shall work out plans on training of their personnel. Training and managerial programs shall be realized at the requests of JVBs in order to ensure safe and efficient business operations as well as development.

Article 21.- Commendation and discipline

1. Organizations and individuals of JVBs that record outstanding achievements in the establishment and development of JVBs, make numerous contributions to the efficient business operations of JVBs shall be commended and/or rewarded according to the commendation and reward regulation promulgated by the Managing Board.

2. Organizations and individuals that commit acts of violating the operation charters of JVBs, abusing their names and positions to seek personal benefits or commit acts of violating the legislation on monetary and banking activities shall, depending on the nature and seriousness of their violations, be handled according to the current law provisions.

Chapter VI

TRANSFER, DISPUTES AND DISSOLUTION

Article 22.- Capital transfer

1. The partial or full transfer of contributed capital proportions of the Vietnamese party and/or the foreign party to a JVB to other parties inside or outside the joint venture shall be effected according to the provisions of law, with pre-emptive right given to the joint-venture parties. In case of capital transfer to parties outside the joint venture, transfer conditions must not be more favorable than the conditions set for the parties inside the joint-venture (the parties prescribe in detail the transfer conditions).

2. When a party wishes to transfer its contributed capital, such transferor shall send written notices thereon to the capital-contributing parties at least ... months before the transfer (the parties reach agreement thereon by themselves). Notices shall be considered valid if they are made by the following mode: ... (the parties reach agreement thereon and prescribe in detail by themselves).

3. Cases of transfer:

In cases where the transfer of contributed capital proportions among the JVB parties exceeds the rate (...) (prescribed by the current legislation), such transfer must be approved in writing by the State Bank.

In case of transfer of contributed capital to parties outside the joint venture: The transfer shall be effected only when it is approved in writing by the State Bank. Such new partners shall enjoy all rights and bear all obligations of the transferor (JVBs shall prescribe in detail this matter by themselves).

4. In all cases of capital transfer, the transfer of contributed capital proportions must be agreed upon by all parties that have contributed such capital.

Article 23.- Disputes

Disputes between joint-venture parties or between JVBs and individuals or other legal persons shall be settled according to the current law provisions (the parties negotiate thereon and may prescribe in detail the dispute settlement).

Article 24.- Termination of operation

A JVB shall terminate its operation in the following cases:

1. When the operation duration inscribed in its license or in decision on extension of license duration expires but it fails to apply for extension or its extension application is disapproved by the State Bank;

2. It applies for operation termination ahead of time;

3. It has its establishment and operation license withdrawn.

Article 25.- Bankruptcy and dissolution

1. The bankruptcy of JVBs shall comply with the provisions of current legislation on bankruptcy of enterprises.

2. The dissolution of JVBs shall be effected by modes agreed upon by the parties themselves in compliance with the current law provisions.

Chapter VII

IMPLEMENTATION PROVISIONS

Article 26.- Amendment and supplement to the charter

This charter shall be amended and/or supple-mented under unanimous decisions of the Managing Board and such amendments and/or supplements must be approved by the State Bank.

Article 27.- Implementation effect and signing date

This charter takes effect after it is approved by the State Bank of Vietnam.

This charter is signed on ..., in/at..., and includes..... originals in Vietnamese.

On behalf of the Managing Board

Chairman
(Signature and seal)